Changes in the Tax Cuts and Jobs Act of 2017 that Impact Individual Taxpayers for Non-Business Items

The Tax Cuts and Jobs Act of 2017 makes substantial changes to the income taxes of individuals.

The Act's individual changes noted in the attached chart generally expire on January 1, 2026, and the speculation will continue as to whether such changes will remain thereafter. There is no substitute for a review of your personal situation and how the changes impact you.

TAX CUTS AND JOBS ACT 2017
Individual tax changes
Old law New law Code Section Effective date *
Tax brackets (7)
10%-39.6%
Tax brackets (7)
10%-37%
§ 1(j)(1) &(2);
brackets adjust for
post 2018 inflation.
Tax years beginning
after December 31,
2017 and before
January 1, 2026.
Kiddie tax at parents'
rates on certain
unearned income
Kiddie tax at trust and
estate rates on all
unearned income
§ 1(j)(4); parents'
rates no longer
relevant.
Tax years beginning
after December 31,
2017 and before
January 1, 2026.
AMT: 2017
exemptions: $84,500
MFJ; $54,300 singles.
Phase out starts at
$160,900 MFJ;
$120,700 singles
2018 exemptions:
$109,400 MFJ;
$70,300 singles.
Phase out starts at
$1,000,000
MFJ;$500,000
all others.
§ 55(d)(4). Tax years beginning
after December 31,
2017 and before
January 1, 2026.
Self created patents,
inventions, designs,
etc. could be capital
assets in certain
instances.
Such items cannot be
capital assets or
§ 1231 property.
§ 1221(b)(1)(C). But
§ 1235 still exists.
Dispositions after
December 31, 2017
and before January 1,
2026.
Alimony deducted by
payor; taxable to
payee
Cannot be deducted
by payor and not
income to payee
§ § 215 and 71 Instruments executed
or modified after
2018, latter only if
expressly provided.
Expires January 1,
2026.
Business related
moving expenses are
nondeductible and
moving expense
reimbursements are
excludable.
Deduction and
exclusion repealed
except for certain
military moves
§ § 217 & 132(a)(6),
132(g)
Tax years beginning
after 2017 and before
January 1, 2026.
Old law New law Code Section Effective date *
Tax deferred rollover
to SSBIC available
Publicly traded
securities cannot be
rolled over to a
SSBIC.
§ 1044 (repealed) Sales after December
31, 2017 and before
January 1, 2026.
Child tax credit:
$1,000/ child; phased
out at $110,000 for
MFJ.
Credit increased to
$2,000/child & $500/
other dependents;
phase out starts at
$400,000 for MFJs;
still refundable.
§ 24(h)(1).
Refundable amount
capped at $1,400 per
child.
Tax years beginning
after 2017 and before
January 1, 2026.
Personal exemptions
@ $4,050 plus
standard vs. itemized
deductions (phase
outs for high
incomes).
Personal exemptions
eliminated; standard
deductions nearly
doubled.
§ § 151; 63. See
below for removal of
itemized deduction
haircut.
Tax years beginning
after 2017 and before
January 1, 2026.
§ 529 plans used for
college expenses only.
Plans can be used for
K-12 expenses up to
$10K per year @
public, private or
religious schools.
§ 529 Distributions made
after December 31,
2017 and before
January 1, 2026.
Cancellation of
student loan debt for
meeting work
requirements is
excluded from
income.
Exclusion is expanded
to include cases of
death or total
disability of the
student; only applies
to certain loans.
§ 108(f) Cancellations of loans
after December 31,
2017 and before
January 1, 2026.
Rollovers of § 529
plan accounts to
§ 529A (ABLE)
accounts not
permitted.
Such rollovers now
permitted, provided
the beneficiary or a
family member owns
the § 529A account.
§§ 529 & 530 Distributions after
December 22, 2017
and before January 1,
2026.
Haircut on certain
itemized deductions
for high incomes
No haircut on such
deductions.
§ 68 Tax years beginning
after 2017 and before
January 1, 2026.
Old law New law Code Section Effective date *
Home mortgage loan
interest deduction
limited to $1M of debt
and $100K of home
equity loans.
Home mortgage loan
interest limited to
$750K of debt. No
home equity loans.
§ 163(h) Tax years beginning
after 2017;
refinancings of and
loans on or before
December 15, 2017
and contracts before
December 15, 2017
that close before April
1, 2018 are not
impacted. Expires
January 1, 2026.
Personal state and
local taxes are part of
itemized deductions
MFJs can only deduct
$10K of property or
income (or sales)
taxes. No prepayment
of future year's
income taxes.
§ 164 Tax years beginning
after 2017 and before
January 1, 2026.
Personal casualty
losses exceeding 10%
of AGI are itemized
deductions, more
beneficial treatment of
certain federal
disasters.
No personal casualty
losses except for
limited Presidentially
declared disasters.
§ 165(h)(2) Tax years beginning
after 2017 and before
January 1, 2026.
Gambling losses only
to extent of gambling
winnings; other
gambling expenses
available regardless.
Gambling losses
include all gambling
expenses, thus further
limiting other
gambling expenses.
§ 165(d) Tax years beginning
after 2017 and before
January 1, 2026.
Medical expense
deduction floor of
7.5% or 10%.
Medical expense
deduction floor of
7.5% for all taxpayers
§ 213(a) and applies
for AMT as well.
Tax years beginning
after 2016 and before
January 1, 2026.
Miscellaneous
itemized deductions
subject to 2% floor.
No miscellaneous
itemized deductions.
§ 67 Tax years beginning
after 2017 and before
January 1, 2026.
Old law New law Code Section Effective date *
Congressional living
expenses are
deductible if ≤ $3K/yr
Congressional
members cannot
deduct away from
home living expenses.
§ 162(a) Tax years beginning
after December 22.
2017 and before
January 1, 2026.
10% tax for early
distributions from
retirement plans
applies to
distributions due to
natural disasters.
No such early distrib.
tax for those having
principal place of
abode within a natural
disaster area, three
years to recognize
distributions and to
recontribute; net
disaster loss deduction
in excess of $500 w/ot
regard to 10% floor.
§§ 72(t) & 165 Tax years beginning
after 2017; net
disaster loss deduction
applies to disasters in
tax years beginning
after December 31,
2015 and before
January 1, 2018.
Expires January 1,
2026.
Exclusion for
employee
achievement awards
limited to tangible
personal property
<$400.
Tangible personal
property excludes
cash, gift certs.,
vacations, meals,
lodging, tickets and
securities
§ 274(j); codifies
Prop. Reg. § 1.274-
8(c)(2).
Amounts paid or
incurred after 2017
and before January 1,
2026.
Exclusion for
qualified bicycle
commuting
reimbursements up to
$20/ month.
Exclusion for such
reimbursements is
repealed for income
and employment tax
purposes
§ 132(f)(1)(D) Tax years beginning
after 2017 and before
January 1, 2026.
Contributions to
ABLE accounts
excluded per § 529A
For beneficiaries,
contribution limit
increased; savers'
credit applies to
contributions
§ § 25B & 529A Tax years beginning
after December 22,
2017 and before
January 1, 2026.
Exclusions for combat
zone pay
Extended to military
serving in Egypt's
Sinai Peninsula
§ 112 Effective beginning
June 9, 2015. Expires
January 1, 2026.
Old law New law Code Section Effective date *
IRA and ROTH IRA
recharacterizations of
contributions and
conversions.
Recharacterization of
IRA to ROTH IRA
conversion no longer
permitted, but
recharacterizing
contributions is still
permitted.
§ 408A(d)(6) removed Tax years beginning
after 2017 and before
January 1, 2026.
Retirement plan loans
offset vs. plan balance
are treated as
distributions; 60 day
rollover available.
Extend rollover date
to due date (including
extensions) of tax
return for tax year of
the offset.
§ 402(c)(3) Tax years beginning
after 2017 and before
January 1, 2026.
Rules for deferred
compensation plans
do not apply to
volunteer's benefits up
to $3K per year.
Increases benefit
available to $6K per
year.
§ 457(e)(11) Tax years beginning
after 2017 and before
January 1, 2026.
Charitable
contributions to public
charities limited to
50% of individual
AGI.
Increased to 60%. § 170(b)(1)(A) Tax years beginning
after 2017.
80% deduction for
contributions that
include right to
purchase tickets.
No deduction
available for such
contributions.
§ 170(l) Contributions made in
tax years beginning
after December 31,
2017
Donor substantiation
requirement for
contributions is
reduced when charity
files a return stating
information.
No exception to
substantiation for
donors in this
instance.
§ 170(f)(8)(D) Tax years beginning
after 2017.
Old law New law Code Section Effective date *
Time to contest an
IRS levy on property
and request return of
wrongfully levied
property by persons
claiming an interest in
such property
Expands the time
periods from 9
months to 2 years.
§ § 6343 & 6532;
Treas. Regs.
§ § 301.6343-2(a)(2)
& 301.6532-3(a).
Levies made after
December 22, 2017
and to levies for
which current 9
month period has not
expired as of such
date. Expires January
1, 2026.
Individual mandate to
maintain minimum
health care coverage
or incur tax penalty
Tax penalty removed § 5000A Months beginning
after December 31,
2018. Expires January
1, 2026.

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